Norcros completes sale of loss-making subsidiary
Bathroom and kitchen products provider Norcros has finalised the sale of its subsidiary, Johnson Tiles UK.
The sale for £1m to its UK management team comprising managing director Stephen Dixon, commercial director Rich Kelsall and procurement director Jason Bridges was first announced in April.
The deal was led by Chris Silverwood and Tony Norwood, partners at Harrogate-based corporate finance and restructuring boutique CorpFin.
An £8m revolving credit facility was sourced by CorpFin from Allica Bank, led by Ian Flaxman, head of growth finance, to provide working capital facilities to the new entity.
Thomas Willcocks, chief executive of Norcros plc, said: “We are pleased to have completed this sale as planned. At our recent Capital Markets Event we reiterated our strategic priorities, namely M&A, Organic Growth, Operational Excellence and ESG and we will continue to ensure that our capital allocation is aligned accordingly.
“This sale will allow Norcros to focus on and accelerate the execution of our growth strategy. Johnson Tiles UK has been a long-standing partner of the Group and we thank them for their significant contribution.”
Chris Silverwood of CorpFin said: “In a challenging time for UK manufacturing, the future of the business demands a root and branch review of strategy to establish new firm foundations for success, and the MBO enables the first stage of that process.
Norwood added: “This was a highly complex situation successfully navigated due to the collaborative and pragmatic approach of the management team and Norcros, both of whom recognised that an MBO was in the best interests of all staff, customers and shareholders.
“The transition to a fully outsourced model, alongside the secured funding package, will allow Johnson Tiles to maintain its market-leading position following the buy-out and ensure that the company is ideally placed to benefit from future growth.”
